Vanguard Chief Economist, Joe Davis looks at economic growth trends and what they might mean for the future.

Transcript:

Great question. Really focuses on what normal is. I mean, clearly, the past decade we haven’t grown by normal standards. Historically, the U.S. economy has grown roughly 3.5, 4% adjusted for inflation; past ten years we’ve been half that pace.

But trends also, historically, have never been permanent and that’s large part because productivity ebbs and flows through time. We are clearly at a low point, but when I look at the private sector and its ability to innovate, and in many industries I look at, their pace of innovation is accelerating not decelerating. So when I put that altogether, even with the fiscal austerity in store, potentially, over the next several years, I would imagine at some point over the next three to five years, we are talking about a higher growth trajectory for the United States.

Joe Davis

Joe is Vanguard's global chief economist and head of Vanguard Investment Strategy Group. He's also a member of the senior portfolio management team in Vanguard Fixed Income Group. Joe's global research team is responsible for overseeing Vanguard's investment methodologies and asset allocation strategies for both institutional and individual investors. They also provide thought leadership on a broad range of investment topics, including the capital markets, the global economy, and portfolio construction. In 2004, Joe was selected as a faculty research fellow at the National Bureau of Economic Research for his contributions to the fields of economic history and U.S. business cycles. Before joining Vanguard, Joe spent time as an economist at Moody’s Analytics. Joe earned his M.A. and Ph.D. in economics at Duke University.